NEIL CAVUTO, HOST OF “YOUR WORLD”: We have got this debt crisis slamming Europe. But in the middle of all of this mess, would you believe there is a European economy actually growing at a pretty good clip? Actually a very good clip. Georgia.

Georgia, its economy expected to jump more than 4 percent this year. Just by comparison, the United States economy is flat. It’s a far cry from neighbors in his region that are not even growing. They’re deteriorating quickly. You have seen all the uprisings there.

Georgian President Mikheil Saakashvili joins us right now.

Mr. President, good to have you back.

MIKHEIL SAAKASHVILI, PRESIDENT OF GEORGIA: Very nice to be back on your show.

CAVUTO: Boy, I know they were tempting you -- that is, the Europeans -- to join the European Union, to join their elite club. You were always leery.

SAAKASHVILI: Actually, we need to join Europe for all the political, cultural, civilization reasons, because where we are in that region, Georgia culture is very European. It’s the oldest Christian country. We have been Christian since the fourth century.

CAVUTO: But you haven’t. You haven’t joined them. Why not?

SAAKASHVILI: Well, we are in the process. However, of course, we worried by what happens. You’re right. This year, we will be growing not even 4 percent. I think my prediction would be almost 6 percent, maybe more than 6 percent.

(CROSSTALK)

CAVUTO: Which is all the more reason why they want you.

SAAKASHVILI: Unless the world economy will go to hell anyway.

But Georgia has done it because we have a number of solid credentials. We have the lowest or second lowest corruption rate in Europe. We used to one of the most corrupt in the world. We are second safest country in Europe, and we -- our capital is the safest in Europe. We used to be totally crime-ridden. We are the easiest place to do business in Eastern and Central Europe, precisely because we cut regulations, we diminished the government, we decreased the taxes.

CAVUTO: Look who you border, Russia. You have got Vladimir Putin reasserting himself. Should we be worried?

SAAKASHVILI: Well, Russia is going through a very, very turbulent period. And the main motto they have right now, there are no reforms, be assertive. The perception they have that now that the West and America might be overstretched in other areas that is the time that the whole area of former Soviet Union, they are up for grabs.

CAVUTO: So they feel more confident?

SAAKASHVILI: Yes. But, as I said, I saw a recent poll where 24 percent of Russians wanted to leave that country for good.

And you look at that, and you look at us, and I see a lot of Russians who, despite the fact that the official government of Russia totally hates Georgia -- they occupy 20 percent of our territory. They expelled half-a- million people from their houses and they decided -- Putin decided one day that it’s no longer their house, their home, so they can’t come back.

CAVUTO: Well, Putin, through military helicopters at the time of that little incident a couple years ago, tried to kill...

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SAAKASHVILI: Yes.

CAVUTO: But, now, what are your relations like with Russia?

SAAKASHVILI: Well, as I said, they do not recognize our government. They don’t allow people to go back to their homes. They do not recognize even a cease-fire agreement that they themselves signed.

They occupy a part of our territory. And officially it’s called by U.S. government and U.S. Congress as official illegal foreign military occupation. But, at the same time, there is this group of thinking people in Russia, educated people, upper middle class, people who want to see entrepreneurship develop and free market and democracy.

CAVUTO: They seem to be losing out.

SAAKASHVILI: And they seem to regard Georgia as a model.

And my hope for Russia is that -- to paraphrase President Obama, in short term, I think Russia will get worse before it gets better.

CAVUTO: But Russia assumes that Europe will get worse before it gets better. And they are going to take advantage of that. Are you worried?

(CROSSTALK)

SAAKASHVILI: The main message is, obviously, there is a problem with Europe, and there are some problems with America.

But I think my main take on the situation is that no matter what are say problems are in America, American leadership in the world is still unchallenged. And America will pull together...

(CROSSTALK)

CAVUTO: So you think we will get out of whatever we are in?

SAAKASHVILI: I am sure America will get out.

CAVUTO: You think we will get out of it with President Obama or someone else?

SAAKASHVILI: Well, that’s -- I think the American people will get over the whole situation and will overcome and ultimately America will stay as the ultimate force for good.

And America is the only power in the world that is absolutely unchallenged in that, that has power to change the world for the good, including countries like Georgia, who believe in very much the same ideals. So it’s America. Europe will follow America’s suit. Europe on its own cannot be -- it just cannot really be successful.

And, by the way, I think one of the lessons this crisis is teaching everybody, people should stay together. Those people who have the same ideals, same way of life, they should not look for separate solutions.